Comments on: Where Should You Invest – TSP or IRA? http://themilitarywallet.com/invest-tsp-roth-traditional-ira/ Personal finance for military, veterans, and their families Mon, 28 Jun 2010 13:29:04 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Ryan http://themilitarywallet.com/invest-tsp-roth-traditional-ira/comment-page-1/#comment-2131 Ryan Tue, 12 Jan 2010 17:34:35 +0000 http://themilitarywallet.com/2008/02/11/invest-tsp-roth-traditional-ira/#comment-2131 Mike, You can do transfers and rollovers into your TSP once you have it established. See page 7 of the pdf <a href="http://www.tsp.gov/forms/tspbk08.pdf" rel="nofollow">Summary of the Thrift Savings Plan</a>. Best of luck. Mike, You can do transfers and rollovers into your TSP once you have it established. See page 7 of the pdf Summary of the Thrift Savings Plan. Best of luck.

]]> By: Mike http://themilitarywallet.com/invest-tsp-roth-traditional-ira/comment-page-1/#comment-2130 Mike Tue, 12 Jan 2010 16:40:32 +0000 http://themilitarywallet.com/2008/02/11/invest-tsp-roth-traditional-ira/#comment-2130 Ryan, I left private business several years ago and part of my portfilio is in a SEP IRA. Can I transfer my SEP into my TSP? Thanks, Mike Ryan,
I left private business several years ago and part of my portfilio is in a SEP IRA. Can I transfer my SEP into my TSP? Thanks, Mike

]]> By: Brandi http://themilitarywallet.com/invest-tsp-roth-traditional-ira/comment-page-1/#comment-1387 Brandi Tue, 07 Apr 2009 00:40:50 +0000 http://themilitarywallet.com/2008/02/11/invest-tsp-roth-traditional-ira/#comment-1387 I have a question for you - Is it really advantageous to invest money into the TSP while being deployed to a tax free zone? After all, the money is already tax free, and you do not get a tax deduction for the contribution (it's basically a nondeductible contribution). Wouldn't it be better to hold off on contributing until you are out of the tax free zone (and better yet, take advantage of the savings deposit program) and then make increased contributions that will reduce your taxes? I understand the money is isn't taxed upon withdrawal and that the earnings are tax deferred, but the contributions won't be taxed in the first place and capital gains tax rate on the earnings will be lower than the tax rate on the earnings if it was withdrawn from the TSP (withdrawals are taxed at the individual's income tax rate, not at capital gains rate). Just curious. I am about to deploy in a few days and am currently debating my options. I've maxed out my Roth for the year and I'm trying to decide if I should invest additional long-term savings into a taxable account or in the TSP. I have a question for you – Is it really advantageous to invest money into the TSP while being deployed to a tax free zone? After all, the money is already tax free, and you do not get a tax deduction for the contribution (it’s basically a nondeductible contribution). Wouldn’t it be better to hold off on contributing until you are out of the tax free zone (and better yet, take advantage of the savings deposit program) and then make increased contributions that will reduce your taxes? I understand the money is isn’t taxed upon withdrawal and that the earnings are tax deferred, but the contributions won’t be taxed in the first place and capital gains tax rate on the earnings will be lower than the tax rate on the earnings if it was withdrawn from the TSP (withdrawals are taxed at the individual’s income tax rate, not at capital gains rate).

Just curious. I am about to deploy in a few days and am currently debating my options. I’ve maxed out my Roth for the year and I’m trying to decide if I should invest additional long-term savings into a taxable account or in the TSP.

]]> By: Ryan http://themilitarywallet.com/invest-tsp-roth-traditional-ira/comment-page-1/#comment-6 Ryan Thu, 14 Feb 2008 12:13:40 +0000 http://themilitarywallet.com/2008/02/11/invest-tsp-roth-traditional-ira/#comment-6 Kirk, Thank you for the comment. I separated from the USAF two years ago, and I left my money in the TSP. I know there is no way I will ever be able to match the low fees they charge. My wife also has a TSP account, and she separated last fall. Again, we won't move those funds. We also have a portion of our money that was earned in tax free zones, so we don't want to lose that tax free eligibility. Kirk, Thank you for the comment. I separated from the USAF two years ago, and I left my money in the TSP. I know there is no way I will ever be able to match the low fees they charge. My wife also has a TSP account, and she separated last fall. Again, we won’t move those funds. We also have a portion of our money that was earned in tax free zones, so we don’t want to lose that tax free eligibility.

]]> By: Kirk http://themilitarywallet.com/invest-tsp-roth-traditional-ira/comment-page-1/#comment-5 Kirk Tue, 12 Feb 2008 23:48:14 +0000 http://themilitarywallet.com/2008/02/11/invest-tsp-roth-traditional-ira/#comment-5 Good analysis. I would reiterate on the TSP though that the funds are EXTREMELY low cost. As a financial planner, I keep client's money in the TSP because no ETF or index fund on the market can touch the costs of the TSPs. You also correctly point out there are few options in the TSP, but you can work around them with your Roth IRA, which is important to fund, especially for military folks as Ryan points out. Good analysis. I would reiterate on the TSP though that the funds are EXTREMELY low cost. As a financial planner, I keep client’s money in the TSP because no ETF or index fund on the market can touch the costs of the TSPs.

You also correctly point out there are few options in the TSP, but you can work around them with your Roth IRA, which is important to fund, especially for military folks as Ryan points out.

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